Capital Gold Initiating Plans for Increased Gold Production



    
    Additional Water Rights Secured
    

    NEW YORK, Oct. 9 /CNW/ -- Capital Gold (TSX: CGC; OTC Bulletin Board:  
CGLD) reported  today that the Company is initiating infrastructure
enlargement at its  El Chanate gold mine in Sonora, Mexico as the Company
continues  to maximize gold production.  Current production is estimated to be
50,000 ounces per year. Given the recent 70% increase in the gold reserves at
the El Chanate mine, Capital Gold's management team is looking to increase
production levels to 60,000 ounces per year in 2008. Beyond that, they are
currently studying to determine if production levels can be increased up to
100,000 ounces per year by 2009, and continue thereafter at that level for the
remaining life of El Chanate. Management is currently addressing the following
areas:

    
    1. Golder Engineering has been contacted to supply EPCM (engineering,
       procurement and construction management) services for leach pad
       expansion and to study the impact of the planned mining increase.
       Capital Gold's Chairman, Gifford Dieterle, said that, "In so doing, we
       are taking advantage of Golder's recent successful work at El Chanate
       and continuing to call upon the services of their highly experienced
       personnel - all of whom are well familiar with our mine."
    2. Chief Operating Officer John Brownlie added that the Company is
       discussing options available with the crusher manufacturer, Excel
       Machinery, with regards to adding an additional secondary crusher into
       the crushing circuit, to enable the system to handle increased tonnage.
       "We built some additional crushing capacity into the system from the
       original design. Right now, we are using that additional capacity to
       crush and stack almost 10,000 tonnes per day." The feasibility study
       only called for 7,500 tonnes per day. "Another crusher should move that
       tonnage up closer to 14,000 tonnes per day," Brownlie said.
    3. Additional water rights have been secured for increased leaching
       operations and gold production.  Brownlie said, "Adequate water supply
       is a critical component when experiencing rapid mine growth, especially
       when operating in a desert environment." "We have acquired a more than
       sufficient supply of water for the mine and so, have secured our future
       for the long-term."
    

    
    Some of the key milestones that have recently been achieved:
    (*)  70% increase in the proven & probable gold reserve, now 832,000 ounces.
    (*)  Over 6,850 ounces of gold produced during the first two months of
       production.
    (*)  Currently producing approximately one ounce of silver for every ounce
       of gold.
    (*)  Proceeds generated over the first two months of approximately US$4.4
       million.
    (*)  Over 1.25 million tonnes of ore have now been stacked on the leach
       pads.
    
    In summing up, Mr. Dieterle said the Capital Gold team has made
significant progress at El Chanate and has quickly moved into its new role as
a producing gold company. "We are by any reckoning a stronger company with a
top management team in place, ready to take the fullest advantage of any
opportunity that comes our way," Mr. Dieterle said.
    
    About Capital Gold
    
    Capital Gold Corporation (CGLD: CGC) is a gold production and exploration
company.  Through its Mexican subsidiaries and affiliates, it owns 100% of the
El Chanate gold property in Sonora, Mexico. The proven and probable reserve is
now 832,000 ounces of gold. Further information about Capital Gold and the El
Chanate Gold Mine is available on the Company's website,
www.capitalgoldcorp.com.
    Statements in this press release, other than statements of historical
information, are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements are inherently uncertain. Actual performance and
results may differ materially from those projected or suggested due to certain
risks and uncertainties, some of which are described below.  Such forward-
looking statements include comments regarding the establishment and estimates
of mineral reserves and non-reserve mineralized material, future increases in
mineral reserves, the recovery of any mineral reserves, grade, processing
rates and capacity, estimated future gold production, potential mine life and
future growth of the company. Factors that could cause actual results to
differ materially include timing of and unexpected events during construction,
expansion and start-up; variations in ore grade, tonnes mined, crushed or
milled; delay or failure to receive board or government approvals; the
availability of adequate water supplies; mining or processing issues, and
fluctuations in gold price and costs.  There can be no assurance that future
developments affecting the Company will be those anticipated by management.
    Any forecasts contained in this press release constitute management's
current estimates, as of the date of this press release, with respect to the
matters covered thereby.  We expect that these estimates will change as new
information is received and that actual results will vary from these
estimates, possibly by material amounts.  While we may elect to update these
estimates at any time, we do not undertake to update any estimate at any
particular time or in response to any particular event.  Investors and others
should not assume that any forecasts in this press release represent
management's estimate as of any date other than the date of this press
release.  Additional information concerning certain risks and uncertainties
that could cause actual, results to differ materially from that projected or
suggested is contained in the Company's filings with the Securities and
Exchange Commission (SEC) over the past 12 months, copies of which are
available from the SEC or may be obtained upon request from the Company.




For further information:

For further information: Jeff Pritchard, VP-Investor Relations of
Capital  Gold Corporation, +1-212-344-2785, Fax: +1-212-344-4537, 
pritchard@capitalgoldcorp.com; or Media Inquiries: Victor Webb, or Madlene 
Olson, both of Marston Webb International for Capital Gold, +1-212-684-6601, 
Fax: +1-212-725-4709, marwebint@cs.com; or Investor Relations in Canada: 
Robin Cook, Account Manager of CHF Investor Relations for Capital Gold, 
+1-416-868-1079, Fax: +1-416-868-6198, robin@chfir.com Web Site:
http://www.capitalgoldcorp.com/

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CAPITAL GOLD CORPORATION

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